IRES Ltd.
How to Buy Real Estate in Costa Rica
Buying Real Estates in Costa Rica is simple.
After you have found the right property you have to do the following steps:
1. Make a purchase offer (only if there is hope that a lower purchase price could be achieved), usually for a private seller and older Real Estates
2. Agree to sign a Preliminary purchase agreement, if price and all details are agreed between the parties, usually the moment of the first down payment
3. Final contract in front of a Notary – final payment ONLY with registration in the ground book. Please do remember "Your best friend for buying properties in Italy is your Notary!" Trust him first and tell him everything.
There are no restrictions for foreign citizens to buy property in Costa Rica! It is quite normal to draw up a preliminary purchase agreement between seller and buyer without the assistance of a lawyer. I do not recommend a purchase agreement between the agent and the buyer, unless the agent has a legalised power of attorney from the seller and the seller is informed about this preliminary purchase agreement, but unable to sign or be present at the moment of signature. Another reason could be the selected language you want to sign the contract in.
Usually a minimum of 10 % (ten percent) down payment or deposit has to be paid upon signing the preliminary contract.
If the seller fails to complete the purchase agreement, he has to refund not only the ten percent deposit, but twice the amount in form of a penalty. If the buyer changes idea he would lose the full down payment. The Costa Rican law should guarantee both sides the completion of the purchase.
We recommend the following buying procedure:
If you think that you have found the right property ask for a copy of the formal final contract - Atto notarile - and the copies of all registered floor plans - Schede Catastali (for a house) or Estratto Mappa (for a piece of land) or Elaborato planimetrico (for apartments). Take all those copies to a Geometra (of your choice), and ask him to prepare a final summary document for the notary.
The Geometra will cost you 400 to 500$.
If you do not know the seller or builder, or you do not have a good feeling, we recommend choosing a Notary outside the immediate area to avoid a possible conflict of interest and ask him to prepare the final contract in two languages (in case you do not speak good Spanish). In case you want to buy a newly built property, where the buyers did the notary contract at the same Notary office, you may consider taking the same Notary, because he has a perfect knowledge of the project and can save you a lot of time and money.
Never underestimate the authority of a NOTARY in Costa Rica; having him to complete the full research on the property: title search - and he has to ensure the property is free of debts, mortgages and encumbrances.
Once, all the searches are done and the Notary has prepared the final contract, your purchase should proceed quite straightforwardly. If a problem comes up, you can engage with the help of the Notary a lawyer to try and resolve it before signing the final contract.
If you want to buy a rental or commercial property, always engage a lawyer from the beginning. We do not recommend to buy Rental Properties unless you have a professional rental management onsite. Do not try to make it by yourself.
The final contract usually takes place within 10 to 90 days after the preliminary contract, unless otherwise agreed. The balance of the purchase price has to be paid in the form of a mortgage payment, cash or a bank guaranteed check at the final contract stage. It is very hard to obtain a financing from an Costa Rican Bank.
If you do not speak Spanishyou will need a qualified translator and/or ask the notary for a bilingual contract. (The translator might cost less.)
Purchase tax is the same for foreigners and Costa Rican alike and the basic taxes are:
Three to four percent purchase tax is normal including the notary fee but this can vary. WE recommend getting a price estimate before the final contract is signed.
The yearly property-tax payment is the sole responsibility of the new owner. This tax is very small compared to other countries and is usually calculated by an accountant. Just to give you an idea the taxes for a small not luxury apartment are in-between 100 to 200 $; bigger apartments and small houses are from 300-600 $; villas are starting at 1000 $ p.a.
You can buy any property you want and also any number of properties. There are no limitations. Locals and foreign citizens pay the same property taxes and are taxed the same way. And you can sell your property whenever you want for how much you want.
The information provided herein is intended for your general knowledge only. I.R.E.S. Ltd recommends strongly verifying this information and assumes no responsibility for any consequences!
